Boost for savers as NS&I announces upcoming interest rate increases across variable products

• Premium Bonds prize fund rate up to 4.00% from August draw – highest level since 2007
• Premium Bonds odds to improve, the best in 15 years
• Interest rates for Income Bonds and Direct Saver to be increased from 13 July

Millions of people across the UK are set to see a boost in their savings as NS&I today announces upcoming interest rate increases to its variable products, including Premium Bonds.

Premium Bonds odds highest in 15 years

From the August 2023 prize draw, the prize fund rate will increase to 4.00% from 3.70%, its highest level since 2007. The odds will improve to 22,000 to 1 from 24,000 to 1, meaning that each £1 Bond will have its best chance of winning a prize in almost 15 years.

NS&I estimates that the changes will see an extra £30 million added to the prize fund from August, with an estimated 460,000 extra prizes up for grabs.

Increases to other variable products

The interest rates that NS&I pays on its Direct Saver and Income Bonds are also increasing to 3.40% from 2.85%, effective from 13 July.

NS&I Chief Executive, Dax Harkins, said:

“Premium Bonds are one of the nation’s favourite savings products and I’m delighted that we’re able to improve the odds to the best they have been in almost 15 years, with more prizes, more excitement and more life changing wins for savers up and down the country.

“These changes will benefit millions of NS&I’s savers who have money in Premium Bonds, Direct Saver and Income Bonds.”

Also effective from 13 July, NS&I will be increasing the interest rate that it pays on its Investment Account to 0.85% from 0.60%.

The changes announced today ensure that NS&I’s products remain attractive to customers and that it continues to balance the interests of savers, taxpayers and the broader financial services sector.

Current and new Premium Bonds prize fund rate and odds

Number and value of Premium Bonds prizes

Variable rate savings products

Notes to Editors

1. NS&I is one of the largest savings organisations in the UK, offering a range of savings and investments to more than 24 million customers. All products offer 100% capital security as NS&I is backed by HM Treasury.
2. NS&I announced on 20 June 2023 that the Premium Bonds prize fund rate would increase to 3.70% from 3.30%, with the odds remaining at 24,000 to 1. The changes are effective for the July 2023 prize draw and more information can be found here. 
3. NS&I increased the interest rate it pays on its Direct ISA on 16 May 2023. More information on this change can be found here. 
4. AER stands for Annual Equivalent Rate and enables the comparison of interest rates from different financial institutions and across different products on a like-for-like basis. It shows what the notional annual rate would be if interest was compounded each time it was credited or paid out. Where interest is credited once a year, the rate quoted and the AER will be the same.
5. Tax-free means the interest is exempt from UK Income Tax and Capital Gains Tax. 
6. Information on NS&I’s on sale products can be found here. 
7. Information on NS&I’s off sale products can be found here.